Procurement principles – a particularly European approach

This is the first in our series of ebriefings on the Government's Green Paper: Transforming public procurement. This ebriefing looks at the proposal to set out 'public procurement principles' in the proposed procurement legislation.

Chapter 1 of the Green Paper says that the Government proposes the following principles should be “included in the new legislation”. These principles (with brief thoughts from us on some of them) are:

• Public good – although it is not clear from the paper exactly what is meant by “public good” and how it interfaces with “social value, giving rise to a concern that “public good” might be whatever the Government at the time decides to call it;
• Value for money – although this duplicates obligations many contracting authorities are subject to already;
• Transparency – although it is not clear how the tension between this and the principles of integrity and fair treatment of suppliers, in relation to things like the disclosure of tendered prices and method statements, is to be resolved;
• Integrity – in terms of avoiding conflicts of interest, respecting suppliers’ confidential information and running procurements professionally;
• Fair treatment of suppliers – see our comments above on transparency; and
• Non-discrimination based on nationality – although PPN 11/20 recommends discrimination based on area for below threshold contracts, which will therefore also discriminate against non-national suppliers who are not within the designated area.

The approach of setting out general principles in legislation is a typically European approach to legislation. It’s a bit like placing a legal obligation on citizens to do whatever is necessary to restrict the spread of Covid-19, without setting out the practical steps citizens must follow to comply with that duty.

The typical UK approach to legislation (of setting out detailed rules rather than general principles) leads to greater clarity (and therefore less cost) for contracting authorities and suppliers. It is particularly appropriate for legal jurisdictions such as England and Wales where court decisions are based mainly on previous case law than through working from general principles. It also means that the potential “conflicts” between the requirements of the different principles need to be resolved in the legislation itself, rather than being left to contracting authorities to resolve.  

The European legislative approach of setting out general principles does give greater flexibility though. It also potentially signals a move towards “legislation by guidance”, with the required practical steps being set out in guidance issued later (but which has not received Parliamentary scrutiny) rather than in the legislation itself.

It is curious that a government that has pursued Brexit specifically to be able to set their own rules in areas such as procurement, is proposing such a European approach to legislation.  

We also have concerns over some of the proposed principles. A requirement to follow “national guidance” on the “public good”, may not be appropriate for democratically elected local authorities who may have a different mandate or charitable registered providers of social housing who have different charitable objectives. As set out above, there are tensions between some of the principles which ought to be resolved in the legislation.

We will be making these comments in our response to the consultation paper, which is to be submitted by 10 March 2021. In the meantime please look out for our further ebriefings on the Green Paper.

For more information

For further information in relation to any of the above, please contact your relevant ACS contact or Andrew Millross.